The Scoop
Seeking a compromise over controlling exports to China, the White House plans to direct the US Department of Commerce to allow the export of powerful Nvidia GPUs that are roughly 18 months behind its most advanced offerings, according to a person with knowledge of the plan.
The move, which would send Nvidia H200s to China, seeks to find a middle ground between those who oppose exports of any advanced AI chips and those who worry that restrictions will merely hand the market to Chinese competitors. It also aims to satisfy the Chinese government, which has blocked imports of less powerful chips, such as Nvidia’s H20.
The move comes after comments form Commerce Secretary Howard Lutnick that the decision is in the hands of President Trump. According to a person familiar with the matter, Lutnick is supportive of the strategy. A spokesman from Commerce declined to comment. The H200 exports could bolster Nvidia’s revenue by opening up a huge market for its chips while ensuring US technology remains the standard worldwide.
The US enacted strict export restrictions under the Biden Administration in an effort to prevent China from catching up on AI. But some in the White House believe those restrictions have more or less failed, according to people familiar with their thinking.
Despite the restrictions, Chinese companies like DeepSeek and Alibaba have produced world class AI models and companies like Huawei have made rapid progress in producing hardware to fill the void left by the export restrictions.
Proponents of the restrictions argue that they served to slow China and give US companies a head start on gaining global market share during a critical period.
In the meantime, the US has struggled to revamp its domestic chip manufacturing supply to counter overreliance on Taiwan Semiconductor Manufacturing Company, or TSMC, and China has exerted leverage over the US with its stranglehold on rare earth minerals needed for batteries and other critical technologies.
Spokespeople for Nvidia and the White House did not immediately respond to a request for comment.
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The US initially sought a compromise by allowing Nvidia to export a less powerful version of the H200, known as the H20.
China balked, instructing companies to stop purchasing H20s due to security concerns. The ban gave breathing room to companies like Huawei, which would have had to compete against the H20.
Some in the White House saw the failure of the H20 exports as a win for the Chinese competitors of US chip makers, and went back to the drawing board.
While the H200 isn’t as powerful as chips built on the latest Nvidia architecture, they are powerful enough that the White House hopes China will allow the imports, giving US companies exposure to the world’s biggest single market and a chance to expand market share and ensure standards are built around US products.
Reed’s view
Export controls help in the short term while doing little in the long term. China wants to become technologically self-sufficient and no amount of US policy will change that.
And China’s myopic urge to cut off reliance on US technology is actually a weakness that the US could exploit.
At the same time, the US often seems myopically focused on slowing down China, which is a weakness China can exploit.
But in the race to innovate, the US may be leaving too much of that up to the private sector.
While the private sector is key over the next few years, the government is crucial for long term success, ensuring basic research that isn’t yet commercially viable receives funding. Until we see huge increases in funding for blue sky research at US universities, we’ll know the US isn’t doing everything it can to win the race with China.
Room for Disagreement
Greg Allen, senior adviser with the Wadhwani AI Center at the Center for Strategic and International Studies, argued in recent testimony before the Senate Foreign Relations Subcommittee on East Asia that the chip export controls were critical to the US lead in the AI race:
If the Biden administration had not blocked exports of advanced AI chips, it is possible, perhaps even likely, that the first million chip AI cluster would be built in China, rather than the United States. China has many advantages in the AI race and the disparity in computing resources stands out as almost certainly the largest single advantage that the United States enjoys over China. Two senior executives in key Chinese AI firms have explicitly stated that lack of access to advanced AI chips is the most significant challenge that they face.
In May 2025, Wang Qi, still vice-president at Tencent’s cloud computing unit, said that “The most severe problem is the [limited] resources of [graphics] cards and computing resources,” and that tighter U.S. export controls would, “widen the gap [regarding AI adoption] between China and the US in the short term.” Similarly, in July 2024, DeepSeek CEO Liang Wenfeng said, “We do not have financing plans in the short term. Money has never been the problem for us; bans on shipments of advanced chips are the problem.”